Builders Need To Improve Their Image: Modi
Prime Minister (PM) Narendra Modi on February 13 said his government's Budget announcements would give a fillip to the real estate sector, which must to work to improve its credibility with the masses.
Addressing a real estate conference organised by CREDAI, Modi highlighted the steps taken by his government in the past four- and-half years to boost the sector. He said the new real estate law and the benami property law had helped in bridging the trust deficit between developers and consumers. The sector had also progressed on ease of doing business, as construction permits were being given at a fast pace, he said.
Talking about tax incentives for the housing sector announced in the Budget, the PM said these sops would benefit both the developers and the homebuyers.
The move to exempt people earning up to Rs 5 lakh from payment of income tax would benefit the housing sector as the surplus will find its way into real estate, he said. "Youth will be encouraged to buy house with this exemption," Modi said.
He also listed out other incentives such as increase in the tax deducted at source (TDS) threshold for rental income from Rs 1.80 lakh to Rs 2.40 lakh.
To boost purchase of second homes, Modi said the government had announced that capital gains of up to Rs 2 crore could be rolled over for investment in two housing units from the current one unit only. It also exempted tax on notional rent on a second self-occupied house.
For boosting affordable housing, the PM said the 100 per cent deduction of profit under Section 80-IBA of the Income Tax Act was being extended for one more year to housing projects approved till March 2020. Modi said the period of exemption for levy of tax on notional rent on unsold inventories had also been extended from one to two years.
He said the Goods and Services Tax (GST) on sector had been reduced to eight per cent for affordable housing and 12 per cent for other under-construction homes. The GST rate on various construction materials had also been brought down to 18 per cent from 28 per cent.
Expressing concern over the image of the sector, Modi asked developers to improve their credibility that had been affected because of default by some players. He said demonetisation was a move in that direction.
"The sector plays a catalytic role in providing employment. Do you get enough respect? Who is responsible?" he said, and asked developers to focus on improving their image.
The PM said 1.5 crore houses for the poor had been built at twice the speed to realise the target of housing for all by 2022. "By 2022, all homeless will get a house. We do not make tall claims," he added.
Modi asked developers to target the 'neo middle-class' as large numbers of people were coming out of poverty and urged them to adopt new technologies for faster construction.
With inputs from Housing News